brian: we will be speaking to nicole wallace. alisyn: see you tomorrow. [captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- bill: this is a fox news alert. the u.s. senate killing any hopes of voting on health care reform before congress takes its august recess. that would break a major deadline set by the white house. it also raises questions about the fate of this ambitious and widespread overhaul. good morning, everyone. megyn: it is friday the setback comes from members of the president's own party. now harry reid says any action over health care will not come until september, at the earliest. bill: still, the talks and

negotiations continue. the president will speak with officials today to take the next steps. that is where we are this morning. president obama talks about a moving deadline. what did he say? >> we have heard a lot of this stuff earlier in the day, but the president suggested some of his critics could be trying to break him. >> i am from chicago. [applause] i do not break. >> obviously, a popular line in his hometown. he said that he will keep on fighting. bill: in the meantime, his chief of staff had been interviewed on npr. and when did he say on the house side of on bringing this to the

floor for a vote? >> he said he expects nancy pelosi to bring up the health care bill for a vote next week. he said that she signaled it to his caucus. at a time when the white house is dealing with this, and they say that they cannot vote until after the recess, it creates an interesting situation. house members are not so sure about paying for a surtax. if this blows up, senators could be in trouble when midterm elections come up. bill: so when rahm emanuel wants to bring it for a vote, is nancy pelosi confident that she has the support to pass it? >> it sounds like in, or she will be getting her delegation in line to get the votes.

she has been in conference and is planning to go forward on this. one would expect her to have the support, otherwise, it would be embarrassing for her and for the democratic leadership. bill: thank you. megyn: keeping an eye on the markets before the opening this morning. it is nice to have good news. yesterday, the dow closed up 180 points, above 9000. that is the highest close we have seen since november. we will have an update on the rally in whether we should expect it to continue. bill: i think that some people may way back into their statements over the weekend, just to see. megyn: not me.

i am in the sustained game. bill: 60 minutes from now, we will have two interesting stories. a space walk was cut short yesterday because one of the astronauts' space suits showed rising levels of carbon dioxide. that is not a good thing. we are told that moving too quickly can keep certain air cleansing mechanisms from working as they should. he has been told to slow it down, and they will be installing four batteries today. two were supposed to be installed yesterday. we will be speaking to tom jones, our astronaut in chief. megyn: new developments in the

arrest of a black harvard professor that had the president weighing in. the officers' union is holding a press conference on the matter shortly. this after president obama who said the officers who arrested the professor acted stupidly. gates said that he was the victim of racial profiling. the arresting officer who teaches a class on racial profiling, along with a black officer, says that the professor was being belligerent and deserves the arrest. the charges have been dropped, but the upper range continues. what are the police saying now? >> ever since that press conference when president obama said those words, the police have to basically defend

themselves, their police association, and also the arresting officer. they say that he is a stellar officer. he did not believe the racial motivation played any role in this. in fact, the officer does teach a racial profiling class to other officers. despite that, they will be looking over the matter carefully. a few hours from now, the police union is expected to hold a press conference. megyn: what is expected to happen at that conference? >> they have called it a direct response to comments that the president had said, as well as remarks from duvall patrick.

we may also start to see some transmissions, including audio tapes that could explain what happened. megyn: i believe some have said that from the union point of view, this would exonerate the police. is it 30 degrees or something? what is going on? >> we have torrential rain. it is crazy. megyn: thank you. bill: we had it yesterday. and in the air. megyn: did president obama and fuel to the fire when he said that the officers acted stupidly? was he out of line? we will be speaking about this

debate with one of our contributors. in the meantime, we would love for you to go to foxnews.com to comment. bill: usually government officials get criticized for how they spend money. why the president's cabinet will be criticized for not spending fast enough, while millions of your tax dollars are just sitting there. megyn: and an amazing photograph of a celestial collision. what happens when a fireball crashed into jupiter? (announcer) illness doesn't care where you live...

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megyn: this is an incredible story. it had been yesterday in new jersey where a sweeping corruption sting has led to the arrest of more than 40 people, including several prominent politicians, mayors, religious leaders, and so on. three mayors, two state assemblyman, five rabbis, lend to these in -- to this international investigation. what did they do? what are they accused of? police say the investigation originally focused on money laundering, but soon led to the alleged sale of black market kidneys and fake gucci bags.

they say that some of the charges -- some of those charged with accepting bribes of up to $15,000, and much of that was being solicited for these election campaigns. you cannot make this up. bill: i am looking for a gucci bag and two kidneys. megyn: i have to say, that is not a bad deal for $15,000. bill: what would you do with $3 billion? the department of the interior has not done much. of the $3 billion it has been allocated, it has spent only $12

million. this from a program expected to jump-start the economy. one representative from washington, a representative of the house national -- natural resources committee is with me. what is going on here? >> the head of the interior is testifying, and i think he needs to answer up. president obama said we needed to pass this massive stimulus package in order to create jobs, and we needed to do it right away. the department of interior got nearly $3 billion of that, and secretary salazar said that we have shovel-ready jobs to go. here we are five months later, and less than one-half of 1% of that money has gone out the door. now most americans are asking, where are the jobs?

bill: how many jobs could you create with $9 billion? >> if you left it up to the private sector, probably you could leverage that much more than government spending. what we are seeing more than anything else is the idea of stimulating the economy by spending taxpayer dollars is not working. this is a classic example of that. the national park service itself has $9 billion in backlogs of maintenance repairs. that would qualify as shovel- ready, i would say. here we are with only one half of & of this money being allocated. -- of 1% of this money being allocated. bill: you are not going to get

this money back. perhaps we are going to hear from our viewerrs about this. -- viewers about this. what are you hearing? >> i want to go back to this point first. stimulus dollars were supposed to go out immediately to create jobs. the time frame of this stimulus was supposed to be two years. we are five months into this. the department of the interior has sent out less than one-half

of 1%. do we think that they can spend the rest in the next 19 months? bill: we are not going to get that money back? >> at some point, there will be a debate on that. we are running this massive test -- deficit. if that money is not being spent on supposedly creating jobs, maybe it could go back to paying down the national debt. bill: is there an appetite on the democratic side, among your colleagues in the house to make that public? >> of course not. they are not going to do that. i am just saying that i think america is ready for that debate. we have never had a $1 trillion deficit, and we may be approaching $2 trillion.

bill: thank you. we will talk about this more later. megyn: i and just saying, if you become mayor, that is a nice accomplishment. then you want to keep winning, so how can i keep winning? i can solicit my constituents and tell them how great i will do, or i could sell a kidney. this is insane. by the way, they claim they are innocent. it is being called an incredible act of heroism. a stranger risking his life to save a little girl from a flaming car. this is not the incident that we have been talking about all week. bill: also, it got pretty

dangerous, but they're back at it. astronauts have facing and incredible space walk challenge. megyn: have you seen the pictures of the astronauts doing this thing? i am just saying, ladies, stay tuned. ññ

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bill: a little girl is safe today after a complete stranger risked his life to pull her away from the fiery crash. three people run from the burning car, the little girls still trapped inside. that is when a good samaritan

braved the fire and smoke. he reaches in through the flames, grabbed the child, and carries her to safety. he admits it had him pretty shaken up, but says that anyone would have done the same thing. he will answer that question later today on "happening now." stay tuned for that. megyn: folks making the minimum wage about to see a bump in their paychecks. a federal increase go into effect -- do you know what the minimum wage is? bill: i heard it is $7.25. megyn: if it was $6.55, now is $7.25. that is pretty good. i wonder if the average person knows what minimum wage is. back in my days, it was $4.

bill: i started at $3.15 an hour. megyn: it will be affecting about 3 million people in 30 states, but economists say that in some states, like minnesota, it could end up costing jobs. carina sonn is here to explain. >> now that we know what the increase will be, this is what $7.25 looks like. a lot of restaurant and retail sectors will be affected by this. many companies have known that this change was coming, but they say that it could not have come at a worse time because they did not know what kind of economic environment they would be in. business owners say that they are already hurting. many stores have closed in the past few months because of the recession and some believe that

this could push some over the edge. you are looking now at the owner of this very popular restaurant in the minneapolis area. they do not open for a couple of hours, but how many of your employees will be impacted by this increase, what does it mean for the bottom line? >> we have 45 employees, so our expenses will go up by about 15 dawson dollars a year. that is a lot of money that could go to the bottom line, that could go to the kitchen staff. >> how are you going to deal with the increase? do you have to let anyone go? the death it is tough to let anyone go because we are in the service industry. -- it is tough to let anyone go because we are in the service industry.

>> although some say it will be bad for the bottom line, others say that this 70-cent increase was much needed. these folks are just above the poverty line anyway, and some also believe that this money will also just go back to the economy and may help get us out of the recession. bill: what are you spending money on any ways when you're 16? megyn: rachel was making the minimum wage. it was two days ago. we were talking about my telemarketing career.

bill: order in the court. if you cannot do that, used the taser. those outbursts are over now. megyn: so much talk about health care reform, but how much will it impact your visit to your doctor? longer waits, fewer procedures? a real doctor will walk us through a day in your life if need reform plans to take place. gecko vo: geico's the third-largest car insurance company in the nation. but, it's not like we're kicking back, now, havin' a cuppa tea. gecko vo: takes lots of sweat to become that big. gecko vo: 'course, geckos don't literally sweat... it's just not our thing... gecko vo: ...but i do work hard, mind you.

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bill: this is when we start to hear the sound of money.

that is the big board. just as we talk, they open up and down. we rallied yesterday. closing above the 9000 mark for the first time since november. the dow is up 11% in nine days. maybe it is time to start taking profits. dooley banderas is with us from the new york stock exchange. >> euphoria, optimism, there are so many words to describe yesterday's performance. i want to mention yesterday's performance. one market strategist said that the mood of the market continues to be positive, fueled by companies delivering better than

expected earnings. that is what this is about. earnings reports coming in better than expected, including ibm, intel, and several other blue-chip companies. but the question remains, is this from a rebound in the economy or because of cost- cutting? most businesses have been reducing costs by laying off employees or cutting down on business basics. look at ford motors, for example. great earnings, but compared to last year, it is not very good. they are, in other words, being compared to a lower standard. there are remaining concerns on whether this is based on market reality or euphoria. this may cause some to jump back in the market, but the question

is, is this a sucker's rally? many investors have seen gains in the market and they're putting market -- money back in, but some are fearful that the gain will be short-lived. i want to show you the big board. we are down about 20 points right now. with yesterday's close, i want to stress optimism. keep your fingers crossed for another great clothes. bill: thank you. megyn: by the way, getting e- mails on minimum wage. he says you are not all, my first minimum-wage was 55 cents. despite his public relations blitz, it appears president obama is losing the battle to win the hearts and minds of americans when it comes to the

health care reform. the newest poll shows that people believe reform will make things worse. nearly half believe the quality of their care will deteriorate. less than one third thing that things will get better. so are their concerns well- founded? we have a practicing surgeon and a member of the california senate health commission. i have several questions for you. i need relatively quick answers. this is a date in the life, post-obama reform. how long will i have to wait to get an appointment to see a primary-care physician if we are under a new plant? >> the best example of that is the plan in massachusetts which is a public plan. we know waiting times in

massachusetts are -- and here in los angeles. megyn: and double the national average? >>so longer waits to see your primary-care physician. what about seeing a specialist? >> what is concerning is that a lot of those decisions will be made far from the place where doctors work, such as washington, d.c. there will be political appointees deciding if we have enough doctors working in these kinds of fields, or if the patient should be making these choices. megyn: let us say, god forbid, i get cancer and i need surgery. logically, one feels like you cannot delay that, so well that be affected? >> what we have found, for

example, from canada, with a public plan, treatment can get delayed. some treatments are often weighed in by a government entity that does not know your family, and there could be cheaper alternatives that your doctor does not recommend for june. megyn: really? you feel that we could be at a point when the government says you have been diagnosed with breast cancer, your doctor says you need an operation, but it is not the most cost-effective, so you are going to have the truth is other treatment that we believe it is cheaper. >> it is in the bill. they describe there will be a list of coverages decided by political appointees, not in your exam room. megyn: president obama keeps talking about this red pill,

bluebill example. if the red pill is cheaper and works better, then perhaps, we should have a panel saying go with that. you have a feeling, thinking that it may not work so well. >> it is the individual approach to red parrot -- to health care. if that red pill makes you nauseous, why would we not use something better? you cannot make those decisions from washington. those are examining room decisions. megyn: what about money? the copiague, the premium that i pay. -- co-pay, the premium that high pay, how you expect that to change? >> there is no better example than medicaid. costs have skyrocketed. they have gone up far faster in public programs than they have

in the private sector. we could argue that cost-cutting needs to happen, but using a government plan to do it does not work. megyn: what about senior citizens? aarp has endorsed this plan, but as a practical matter, how are seniors going to see their lives change? >> this was the most frightening part of the plan. among 1018 patients, every five years in a senior citizen has to meet in consultation with their doctors to talk about death with dignity, talk about their choices and whether or not they want things like hydration, nutrition. i do not think how mandating a conversation like this every five years is the type of health care reform we are talking about. megyn: and that begins when you

turn 65? can you imagine being told by the government, go to your doctor and talk about dying. most people never want to talk about it. we will see what happens. it is good to talk to an actual doctor who is talking about your views. thank you for being here. bill: rumor has it come on the bilue pill works better than the red one. net income by the way, i got her name wrong. bill: there has been a space collision that has left a bruise on the planet jupiter. could it happen here? former astronaut tom jones will be here to talk about that.

megyn: and the court room not down get to a man the shock of his life.

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megyn: rule #one of being a criminal defendant, and do not britain the prosecutor, especially in court, especially next to the people with a taser is. megyn: look at the judge. look at the security guard. she does not look too phased.

look at their reaction. there is the security guard. geez. [laughter] he reportedly has a history of court room, bursts, including spitting on a judge. he was not heard and the hearing continued. [laughter] bill: if nobody sees him fall, does he make a sound? an intergalactic does it -- collision making its mark on the planet jupiter. that is the impact point. that is us, planet earth. that impact point was the size of planet earth.

jupiter is enormous. it is over 300 times the size of earth. astronomers are not exactly sure what caused the impact, but an army -- imager stargazer called nasa and asked them to look at it. here we are this morning with tom jones. what causes this giant bruce? >> jupiter was struck by a large asteroid probably. earth and other planets orbit in a cosmic shooting gallery, and jupiter is a pretty large planet, so it gets struck often. bill: could this happen to us? >> certainly.

that asteroid belt produces thousands of pieces of space debris. we get hit all the time, as we have seen in the past. eventually we will get struck again. we are learning now to prevent how we can get struck by these things. over the long run, we are certain to be hit again. we could go the way of the dinosaurs, if we do not learn how to deal with this. the chances of getting killed by an asteroid strike are just about as good as being killed in a plane crash. bill: a space walk is about to happen. two days ago, supposedly carbon dioxide levels were too high. what are we about to see in space today? >> they will be going outside to

swap out the batteries, about the size of a dishwasher from the solar panel. this is the first time they had to replace the batteries since they were launched. today, they are going to have the astronauts moved a bit slower so that the carbon dioxide removal canister can keep up with their workload this time. bill: it sounds so dangerous. have we had a case before where this has occurred? >> yes, it has. the recycling cannister they used gets used after each space walk, and sometimes they are slow to become efficient. they have a close watch on co2 levels. bill: that is a long time to be up there, but they need to do

so, to make sure that they have enough power? >> that is right. this was planned maintenance. i held to some of the testing on this. over time, all of the batteries will be replaced. bill: can you see on our screen? tell us what we are looking at right now. i believe this is a live picture from space. ok, this is from earlier. >> this is likely from inside the airlock as they are getting ready to go up time. bill: this was from yesterday. thank you. we polled a bunch of people and they want to go back to the moon. thank you. by the way, megyn had a keen observation. megyn: there we go.

look at these two gentlemen. that is christopher cassidy on the left. he is married with kids, unfortunately. just kidding. on the right, we have any e.r. doctor and a nasa flight surgeon. i am just saying. before they got married, they must have had a nice life. they are beautiful and they are astronauts. bill: you are a married woman. megyn: i know, but i am just saying. who can object to a bit of all i can be in space? -- eye candy in space? one florida congresswoman says the new house plan for health

care would be bad for seniors. >> democrats released a plan that essentially said to seniors, drop dead. megyn: she is here to explain those comments. and president obama gets involved in the racial profiling controversy. was the president out of line to say that the police acted stupidly? we will examine the story.

f

megyn: first there was the tainted pet food in china, and then chinese toys with lead paint. then the boys in this chinese

toothpaste. now there is a new problem. william la jeunesse says that a tire store outside of los angeles. >> the president is on the spot with labor because of his campaign promise to protect u.s. workers and crack down on unfair trade. the u.s. international trade commission recently ruled that chinese tires, like the ones you see here, are being dumped on the u.s. market, 46 million units a year. they are priced at about half of u.s.-made tires, and imports have jumped in the past few years. steel workers say that this will cost 6000 jobs and close numerous plants. to protect workers, the commission is recommending to the president that he impose a penalty to level the playing field, a 50% tax on these tires. will the president give in to

chinese pressure act but -- basically because of their international pressure and because of our trading relationship? many have called this an uncompetitive practices. >> they said we will not give subsidies to our industry, we will obey environmental laws, safety laws, address the rights of workers, and they have done none of those things are in the in any industry. >> we do not need to practice protectionism. by protecting domestic tire manufacturers, however, by restricting foreign competitors , it is not the appropriate action to take. >> four -- four times the

recommended to the president to make some sort of changes. will he make any changes this time? we will see in september. bill: in the meantime, president obama seeing some push back on his health care reform. now a group of senators are coming together to reach a new compromise. if that is the case, what does that mean for your health care? megyn: she committed that, but her husband is paying for it. what the town manager did that got him the boot.

if we don't act, medical bills will wipe out their savings. if we don't act, she'll be denied coverage because of a pre-existing condition. and he won't get the chemotherapy he needs. if we don't act, health care costs will rise 70%. and he'll have to cut benefits for his employees. but we can act. the president and congress have a plan to lower your costs and stop denials for pre-existing conditions. it's time to act.

megyn: this is a fox news alert. ramping up the debate on health care. lawmakers on both sides resumed debate on health care reform, this as the president said it is ok if you miss the august deadline for a proposal. but will that delay effectively kill this deal? [captioning made possible by fox news channel] captioned by the national captioning institute --www.ncicap.org-- good morning, everyone. bill: good morning. a full slate of news conferences today. the question is, will anything

happen before the august recess? if you do not meet the deadline, what happened next? megyn: rahm emanuel suggesting that there is still hope for an honest vote, so what is the deal? carl cameron is in washington. in the meantime, nancy pelosi also says that there will be a vote. what is the truth? >> the truth is, they hope there will be. rahm emanuel is a great example of the type of pressure that congressional members are getting. he met with nancy pelosi as well as some of the leadership members of those blue dog democrats. it is a coalition within the democratic caucus, and they seem to be holding the cards. yesterday's meeting broke without any negotiations.

they have decided to join republicans and blocked health care in the house. nancy pelosi understands the math, and they need to find a way to get those blue dog to side with them, or risk moving to the floor without them and suffering a huge defeat. she insists she will have the votes when the time comes, but it is unresolved at this point. megyn: why would they do that? the blue dogs spoke to us and said that they felt they were not dealt with honestly. they said that she does not have the numbers to get this passed. yet, she keeps on saying that she has the votes. who are we supposed to believe? >> speaker pelosi says that because she has some experience recently in getting houseboats,

twisting arms and getting them to change their position. perhaps she is confident she can do that with this issue. however, we have to come back to this group. 52 of them going with the republicans is enough. 39 is the magic number, however. if they do that, it is a dead time. more than 39, it would cause major problem for health care. many believe it will raise the deficit and taxes. they are worried any type of public option is going to put a lot of pressure on the private- sector and essentially drive the private industry out of the business. megyn: a big question mark over the house. we do not really know anything.

if they do not get anything done by the august recess, there are questions about what will happen after. moving on to the senate, are they doing better? >> a bit, because they are still talking. today, the chairman of the finance committee, max baucus, is going down to the capital to visit the president with harry reid. there is no more political pressure than can be applied when the commander in chief' summons at a meeting of the legislator. they will be hearing from him to try to come up with a deal. reid and baucus are negotiating in this group of six people. on the republican side, we have chuck grassley. harry reid is not part of the

negotiations, but max baucus is running this. if they do not agree, there cannot be far as an opportunity for anything to pass in the senate. they know if they rushed this, it will be a one-party bill and it may not happen. megyn: whatever criticisms of the house bill, at least we know their proposal, tax, tax, tax. in the senate, they wanted to tax health care benefits that people had, the president obama has said that they would not do that. >> there is one distinction. the house includes the public auction. it is impossible to believe that the democrats will try to push a compromise without that. so far, that is not in the senate proposal. megyn: thank you.

bill: as you are talking, we saw some good pictures from space. megyn: is it the astronauts? officer cassidy? bill: it is really great stuff to watch. in the meantime, president obama announcing a new education initiative, threatening to ruffle the feathers of its biggest supporters, labor unions. it offers carrots and sticks to schools who would be competing for a share of $5 billion of the economic stimulus. schools earn points for reaching certain standards. the more points you earn, the more federal money you get. one standard links performance to teacher pay, something that the teachers' union has consistently opposed. megyn: jobless claims maxine allen at government offices. 16 states now using borrowed

funds to pay. 6 million folks on unemployment. call centers have been overwhelmed. cases that require special review may take even longer. analysts say that all of the in the system were brushed aside before, but we are dealing with them now. bill: we hope it is not the case but u.s. health officials warning that we could see a 40% increase in swine flu cases in the next 24 months. the australian government has said that they had 16 recent cases. we have a reporter in sydney, australia. how bad is it getting? >> it is getting worse.

we are not measuring it in the number of cases, but by the number of people in hospitals and intensive care. now the number of deaths has reached 46 people. hospitals are already been hit -- busy, and it is expected to get worse. bill: we have been hearing about a possible vaccine that is being tested now. what can you tell us about it? >> two australian companies are testing it on 400 volunteers, but it will not be ready for production until october. that is late for australians, but it is just in time for your flu season. one of the companies has a contract with the government to supply 21 million doses that will be added to your local manufacturers. bill: imagine that, 16,000 cases. who is most vulnerable?

>> the problem is, anyone can catch swine flu. the majority of the deaths have been people with pre-existing medical conditions. pregnant women are also at risk. their body is under enough stress. doctors are also saying that perfectly healthy young people with no pre-existing conditions have died from the virus. bill: thank you. best of luck to you and your country. they warned about this fall because we had that wave come back in spring. kids are going to be coming back in school, so let us hope for the best. megyn: a helicopter goes down in maryland, burst into flames. we will tell you what police are saying. bill: she married the town manager in fort myers, florida. soon after, he was fired.

she did not do anything wrong. why was he fired? megyn: and the president calls this police officers' actions stupid. do you think he was humbled by the commander in chief? think again. wwww

megyn: it is a store reigniting the u.s. race debate. president obama's word to sparking count range in law- enforcement communities across the country. it all started with this remark. >> not having been there, not seen the facts, i do not know

what role race played, but i think it is fair to say, any of us would be pretty angry. number two, the cambridge police acted stupidly in arresting someone when there was already proved that they were in their own home. megyn: this was a comment the president made after a police officer in cambridge went to the home of a harvard professor after reports of a break-in. the report said that two black men were breaking into the home. he goes to the home and gets into a confrontation with the home owner who refuses to reply -- comply with the officers directions, and ended up arresting the homeowner. the man is alleging racial profiling. the police officer at the center of the controversy, after being criticized, is standing by his actions.

>> there is no apology from me. i acted appropriately. he was given plenty of opportunity to stop what he was doing. he was acting irrational. megyn: so did the president go too far, or did the officer? with me now is a columbia university professor. >> how are you doing? megyn: this has exploded everywhere. the officer is standing by his actions, the police department is standing by him. the professor is demanding an apology, which the officer says will not come. now we have the president win in. was he out of line as someone who was not firsthand witness to take a side and call the police officers' actions stupid? >> it is a bit unwise to start

an analysis without being there, which is troublesome, but what he said -- and he follows this up with other statements -- is he says it is stupid to arrest someone in their own home after there was a clear mistake of a break-in. megyn: he tried to clarify the remarks, but he did not. the list -- police officer did not arrest him in his home, but on his porch after he says that he was screaming at him and would not quiet down. there were seven people who were looking at him. there was no question he was on the porch when this occurred. so the president was wrong. >> that is right, but he was at his own home. the president's point was that we would all be upset if we were stopped by police and they were not cooperative. this is the starting point of this interaction. the police probably should have

let him alone. megyn: but again, the assumptions in this statement are that the police officer was rude. your statement, that we would all be upset, that is not necessarily true. if the police showed up to my home and wanted to see proof of identification and what not, i would be grateful. the same thing happen to a washington post reporter who was white and he said that the police were not nice to him either. they were not very kind and he never once thought that it was because he had a black wife. it was because police had a difficult job. >> first of all, responding to the gate report, everyone assumes the police report is accurate and unassailable. the cassette -- professor offers a very different story where the

professors were very rude and refused to provide their information. that is a different story. if that is what happened, then it would be normal for the professor to be upside. it is possible also that this particular reporter you talked about was upset, but i would be upset if a police officer was flashing his flashlight to me and was being rude. gates said that he showed them the identification. megyn: but you know that the allegations that are that the oppressor to admit to bring race into it. he said, you were doing this because i am a black man. he made a comment about the officer's mother. when the officer turned to leave, that is when the office -- professor followed him out onto the porch and continue to shout at him. megyn: you and i know that police had a dangerous job.

they do not like people who are out of control, they do not like to be shouted at. they do not know who they are dealing with. who would antagonize a police officer, even if they were angry? you should call their supervisor after it is over. >> i am not saying that is what happened. that is what the police say. the professor has his own statement which is different from the one you just offered. to answer your question, we should not antagonize anyone, but gates was being given a hard time. they knew what they were doing and who they were dealing with. they knew that he was a harvard professor, a homeowner. there was no imminent danger, and the police had the option of leaving, and the police could have left. megyn: but that is exactly what

happened. the professor followed them. the offer -- officer was on his way out, and a professor followed him. he was not arrested under home invasion. by the way, the home was broken into while he was away. he was leaving, according to both parties, when he was followed. my question to you is, -- we are debating because there are two sides of the story -- but where does the president get off? now these police have to worry that they are going to get cured by the president if they behave in a way that he does not think is appropriate? >> the president has a responsibility to deal with these matters, but of course, he should do so with all the facts anin the situation. how can a black president not

address race issues in the country? now that he is dealing with race issues, you are asking, why is he talking about it? we all know that law enforcement has a tough job, and the president respect that, but sometimes law-enforcement makes mistakes. megyn: no sooner do you make that comment and we get word from our white house correspondent that he has said more. we appreciate you being here. mike emanuel, what did you hear? >> i asked robert gibbs if he regretted saying this when he is working so hard, and he said basically he regretted the way that this has worked out the media, has distracted the media from some of the more substantive issues. we asked if he expects the president to say anything more about it and he said he has probably said what he needs to say, reiterating that law enforcement has a tough job.

the president has not yet reached out to either party. megyn: so does this put an end to the story? we will pick this up on the other side of the break.

bill: just to emphasize, according to robert gibbs, the president has said pretty much everything he wants to say on this issue. megyn: not only that, he regrets the media has gone worked up over it. bill: it will not be the final word but -- because we will hear a press conference from the police union. megyn: let me tell you why that is important. the president of the cambridge police patrol officers association, a police union -- they do not represent the sergeant in question -- but he

says that there are audiotapes in the solicitor's office that will show the harvard professor it is the one that turn this into a racial incident. bill: state to inform more on that. in the meantime, this is a fox news alert. consumer confidence falling in july. the first drop in five months, unemployment and low wages run of in terms. consumers still unsure if the economy has hit rock bottom. that is a live look at the national debt clock in new york city. take a look at that monster number. it constantly updates to show each american family's share of the debt. that clock was created in 1989 by a new york real-estate developer. on the road to recovery, in the meantime, we are looking at a number of different industries and how their business is doing. this morning, we look at

tully's coffee shop. they have 500 stores across the country. we last spoke with them in may. we are back again today. we are in seattle. dan's brenner, how is business? >> -- dan springer, how is business? >> sales are improving. when we spoke to you in may, you said sales were down. as the owners here, you were not seeing as much foot traffic. how have things changed? >> sales have increased dramatically. there is more people coming into the store, buying their regular cup of coffee. >> the trend is due in yourself, the individual-sized coffee, tested out and see if they like the flavor.

>> this is a single serving cup. you can get a sample of our coffee. >> how has your marketing changed? people buy these machines in the stores, you have all kinds of other products that you sell. in-store sales are not increase and all that much, so how are you marketing now to people who are counting their pennies more and are not willing to spend $4 on a grid of coffee? >> not every drink is $4. we have drugs that are only about $2 as well. people like the idea of having a cup of coffee in the morning and being able to use these single cup servings at their home or office in the afternoon. >> you are also running a promotion of a feisty and

lemonade for $1. >> not only armed the less expensive right now, but it is seasonal, so it is something that the customers want. >> is business coming back? >> absolutely. we are excited about the future. >> the chairman and founder of kelly's coffee. there you go. -- tully's coffee. bill: thank you. megyn: we are heading back to dallas, texas where we visited in may when gas prices had surged over $2. now to everyone's surprise, the price of gas is falling, and then levelling off, bucking the trend of higher gas prices.

kris gutierrez is with us. >> good morning. one family here in texas is an ominous with selling gasoline -- synonymous with selling gasoline. last time we were here, your dad said that prices were going to go up, but they did, and then prices fell. what is the story? >> it was unusual. 410, 20 years, we have always seen increases in the gas price in the summer. they never really decrease to until september. what happened this year, around july 4, they started to go down for a couple of weeks. we had a steady decline which was shocking. >> we will take it, but all good things must come to an end. if we turn around, you can

actually see they are changing the price of unleaded gasoline. >> as you said, all good things must come to an end. in the past few weeks, every day there has been an increase in the price of gas. diesel fuel has also gone up, but gasoline is especially getting hammered. >> thank you. see you in a few hours. megyn: thank you. bill: we are not going to see a recovery until we see jobs. megyn: nice to see is moving in the right direction. it is a timeless love story. a man falls for a woman who changes his life, so why is the man's town so outraged at the match and demanding that he is kicked out of his job? bill: one american company is

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megyn: is nice to see an american company doing well, even in this recession. apple's profits jumping 15%, shooting past forecasts. in doing so on the back of stronger than expected mac and iphone sales. have you been to their stores lately? bill: all over the city, recession? in the meantime, president obama's vision for health care has the promise of giving all

americans to some coverage. there is a florida congressman who believe that this could come at a serious cost for one group of americans. the following comments got quite a lot of attention. >> democrats released a health care bill which essentially said to american seniors, drop dead. bill: ginny brown weight is on the house ways and means committee and also represents the retirement community in florida. florida is one of the largest retirement centers in the country. you are taking heat. your critics say that you are being reckless. what did you mean? >> when you cut the medicare invented program by billions of dollars, a total of $170 billion, just $158 billion for the fee-for-service, which so many low-income and minority seniors participate in, you take that away from them and they

will be spending an average of $3,000 more for medicare than what they do under the medicare advantage plan. it gets worse. there are cuts to nursing homes, therapy in the medicare programs. when you add all of this up, it is over $535 billion in cuts to the medicare program. when you need therapy, when you need to be in a hospital, there will be cut to the hospitals as well. when you add all of these things up, it is not good. bill: your argument boiled down to this, it will be more expensive rather than less expensive. >> you are right. not only will they be paying more in income tax possibly but for their own health care, they will be paying much more.

bill: your critics say that if you really cared about controlling costs, you would shore up medicare. what do you say to that? >> absolutely, that was my argument. we are starting another health care system here while medicare and medicaid are under an extreme financial problems. in part a, hospitals, they will be paying more than what they take in in 2011. part b will be 2017. bill: what is part be? >> doctors, labs, radiation. bill: do you believe democrats are ready to bring a bill to the floor and vote, as rahm emanuel reported earlier? >> when i speak to my colleagues

on the other side of the aisle, they say they hope and pray a bill is not rushed through. when they go home in august and have to face their constituents, this is not what america wants. bill: do they have the votes to pass? are the moderate democrats ready to get on board? >> we heard earlier this week that nancy pelosi has the votes. then the bill was not continued in committee on energy and commerce. people are asking if she does. i guess time will tell. bill: in the senate, they have put it off until law fall. it would be one heck of a vote that would have to happen on the house side. thank you for your time today. megyn: they are happily married.

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bill: this is a fox news alert. this is gilbert, ariz.. police have got their guy. there was a reverse 911 call put out to the community because they thought this guy had a rifle. they took him away moments ago. ksaz is our affiliate there.

megyn: kelly's court is back in session. walking papers for a public official who tied the knot with a porn star. outstanding citizens of fort myers in the gulf coast. he was the town manager making six figures a year until the council members found out that he had married annabella mota. the mayor of the town and alleges that he was a solid employee and did not do anything wrong, but still the town council voted to fire him. they claimed his wife swine of work would create a disruption. can they do that? let us ask our panel. good morning.

now we need to be responsible not only for our own actions, but for everything our spouses to. is this where we are? >> this case is so wrong. it is absolutely crazy. the man in charge of the firing said that he did a good job, did not violate any rules, and may cause a disruption. they have been married one year and have raised kids, and nobody has said anything. the only disruption came in when these dummys said something. megyn: it is true, they were married a while back and nobody said anything. all of a sudden, people start talking. the mayor is pretty quiet on how

he found out, and then suddenly he says that this will create a distraction. is this legal? >> the only thing i could say is perhaps he had a celebrity morals endorsed and cost. we are going to look get you closely because you are on the town council and the need to make sure that you are -- megyn: no, and they had been that there was a clause that said that he could be fired without reason. normally you know that your employer can fire you if you do not have the contract. that is the city's defense. we can fire him at any time without cause with a unanimous vote. >> but you cannot fire based on the media discrimination. what is the message, it is ok to shack up, but not if you get

married? this is the right to free association. yes, you can fire for a reason, but needs to be legitimate. megyn: is being a porn star akin to being black, having a disability? and there are certain class of that are protected under these types of laws, and i do not remember porn stars being among them. >> that is right. he cannot be fired for whom he associated with. >> it is still illegal in purpose. he needs to hire a lawyer and file a lawsuit. >> i am going to get fired because i married someone who has a legitimate job? she is not doing child

pornography or anything. what is next, can i get fired for stacking my groceries? megyn: how is it even disruptive to his job where he needs to make sure that many town infrastructure is working. how does this affect his ability to do his job? >> i agree it is a stretch, but who knows, the members of the community may not think that it is a legitimate career. i am not saying that it is not. >> it only happened when the mayor and council people came together. they called an emergency meeting. they have been married and living in the open with their kids for over a year. megyn: to clarify, she says she

is not technically in pornography. when i have seen is pornography. she calls herself a priestess of erotic facts. she also says once these ideas are encountered, it is impossible for the spirit not to flourish, the soul to heal, the body and mind to soar with new inspirations and ideals. bill: she is probably right about that. [laughter] megyn: this is good for them in florida. >> maybe keep her off the witness bench. >> keep in mind, they are still going to give him a severance package. >> six months is nothing. >> that is probably what he would have gotten if he sued. megyn: that is right. they only have one in a comedown. let us hope she is successful.

one door closes, another one opens. thank you. nicely done. usually, you can fire someone for any reason, unless it is an illegal reason. they had a first amendment right to watch, endorse, or be in pornography, but their free- speech rights are not unlimited. the question is did the city have a legitimate reason to override their rights? i would accept the lawsuit. bill: you did that almost with a straight face. in a moment, president obama continuing his fight for health care reform. stunning new polls on the health care russia and the economy. you are going to find out what america is saying. megyn: and why wait until the weather and reception to bust out a move? we will show you why one wedding party knows how to do it. .

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megyn: miles over heads, two astronauts are taking an extra long walk outside of the international space station. they are doing it to replace some old batteries. what do you think? yesterday, one of the man had a problem with his space suit and was forced to turn back. now they are embarking on a 7.5 hour walk to install the batteries, each of which weighs 370 pounds. byrd bill: we want to show you obama

's approval rating. we're trying to figure out how americans are feeling. a majority of americans, 54%, approve of his job. but the most surprising number here is the rising disapproval number down here. from january to july, his disapproval has more than doubled, 16% in january, 38% in july. so what is it? the economy, or the push for health-care reform? when it comes to his handling of those issues, here is how the numbers breakdown. half the people we asked do approve of his handling of the economy. less than half approve of the job he has done on health care so far. a look inside the poll numbers shows that the economy might be the driving issue for americans. remember we mentioned this -- it is all about jobs. the top three most important issues for the government to work on right now all relate to the economy.

number one, fixing it in general. that came and a whopping 36%. the second issue out there, creating those much-coveted jobs. the unemployment rate is coming in on double digits soon. and reducing the deficit was #3. that was in a tie with the hottest issue of the day in washington, health care reform. foreign policy is down 1/5 at 7%. another factor might be this. a majority of americans, 53%, do not think mr. obama has a clear plan to fix the economy. if you break it down, 67% of democrats here think he does have one, but 82% republicans do not see it that way and 60%, the independent voters, 60% also

believe there is no clear plan. we found this, however. a significant difference in the following. who do americans think is responsible for the current state of the economy and the deficit? it is not president obama. it is president bush. 61% blamed bush on the economy, 53% blame him for the size of the deficit. if you want more information, there is more online at foxnews.com. au little snapshot about what americans are thinking and feeling and saying today megyn: you have the music in you. this bright says she waited her whole life to dance down the aisle. that dream came true, with a bonus.

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megyn: so much for "here comes the bride." dancing down the aisle. they look good. first the ushers, then the bridesmaids, then the groom. hold on. here h